BILL NUMBER: SB 2029	CHAPTERED  09/30/00

	CHAPTER   1005
	FILED WITH SECRETARY OF STATE   SEPTEMBER 30, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 29, 2000
	PASSED THE SENATE   AUGUST 30, 2000
	PASSED THE ASSEMBLY   AUGUST 28, 2000
	AMENDED IN ASSEMBLY   AUGUST 25, 2000
	AMENDED IN ASSEMBLY   AUGUST 18, 2000
	AMENDED IN ASSEMBLY   JULY 3, 2000
	AMENDED IN ASSEMBLY   JUNE 15, 2000
	AMENDED IN SENATE   MAY 26, 2000
	AMENDED IN SENATE   MAY 1, 2000

INTRODUCED BY   Senator Figueroa

                        FEBRUARY 25, 2000

   An act to amend Sections 7001, 7002, 7003, 7007, 7011.7, 7065.05,
and 7164 of, to amend and repeal Section 7000.5 of, to add Sections
7021 and 7159.3 to, and to add and repeal Section 7092 of, the
Business and Professions Code, relating to contractors.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 2029, Figueroa.  Contractors' State License Board.
   (1) The Contractors' State License Law provides for the creation
of the Contractors' State License Board with 13 members.  Under
existing law, these and other related provisions will become
inoperative on July 1, 2001, and will be repealed on January 1, 2002.

   This bill would require the board to conduct various studies and
reviews, and to report to the Department of Consumer Affairs and the
Legislature by October 1, 2001.  This bill would  increase the
membership on the Contractors' State License Board to 15, as
specified, and would enact other related provisions.  The provisions
affecting the board's existence would become inoperative on July 1,
2003.
   (2) Under existing law, the board, with the approval of the
Director of Consumer Affairs, is required to appoint a registrar of
contractors who, among other matters, is responsible for reviewing
and investigating complaints regarding licensed contractors filed
with the board.
   This bill would require the board to establish as a goal, the
improvement of its disciplinary system, as specified, and would
require the director to appoint a Contractors' State License Board
Enforcement Program Monitor no later than January 31, 2001, whose
duties would include monitoring and evaluating the board's
disciplinary system and reporting his or her findings, as specified,
to the board, the Department of Consumer Affairs, and the
Legislature.  This bill would make the provisions that pertain to the
enforcement program monitor inoperative on January 31, 2003.
   (3) Existing law requires home construction contracts and home
improvement contracts, as defined, to be in writing and to contain
specified provisions.
   This bill would additionally require those contracts as well as
estimates for home improvement work to contain provisions pertaining
to the general liability insurance coverage of the contractor party
to those contracts.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 7000.5 of the Business and Professions Code is
amended to read:
   7000.5.  (a) There is in the Department of Consumer Affairs a
Contractors' State License Board, which consists of  15 members.
   (b) The repeal of this section renders the board subject to the
review required by Division 1.2 (commencing with Section 473).
However, the review of this board by the department shall be limited
to only those unresolved issues identified by the Joint Legislative
Sunset Review Committee.
  (c) This section shall become inoperative on July 1,  2003, and, as
of January 1,  2004, is repealed, unless a later enacted statute,
which becomes effective on or before January 1,  2004, deletes or
extends the dates on which it becomes inoperative and is repealed.
  SEC. 2.  Section 7001 of the Business and Professions Code is
amended to read:
   7001.  All members of the board, except the public members, shall
be contractors actively engaged in the contracting business, have
been so engaged for a period of not less than five years preceding
the date of their appointment and shall so continue in the
contracting business during the term of their office.  No one, except
a public member, shall be eligible for appointment who does not at
the time hold an unexpired license to operate as a contractor.
   The public members shall not be licentiates of the board.
  SEC. 3.  Section 7002 of the Business and Professions Code is
amended to read:
   7002.  (a) One member of the board shall be a general engineering
contractor, two members shall be general building contractors, two
members shall be specialty contractors, one member shall be a member
of a labor organization representing the building trades, one member
shall be an active local building official, and eight members shall
be public members, one of whom shall be from a statewide senior
citizen organization.
   (b) No public member shall be a current or former licensee of the
board or a close family member of a licensee or be currently or
formerly connected with the construction industry or have any
financial interest in the business of a licensee of the board.  Each
public member shall meet all of the requirements for public
membership on a board as set forth in Chapter 6 (commencing with
Section 450) of Division 1.  Notwithstanding the provisions of this
subdivision and those of Section 450, a representative of a labor
organization shall be eligible for appointment to serve as a public
member of the board.
   (c) Each contractor member of the board shall be of recognized
standing in his or her branch of the contracting business and hold an
unexpired license to operate as a contractor.  In addition, each
contractor member shall, as of the date of his or her appointment, be
actively engaged in the contracting business and have been so
engaged for a period of not less than five years.  Each contractor
member shall remain actively engaged in the contracting business
during the entire term of his or her membership on the board.
   (d) Each member of the board shall be at least 30 years of age and
of good character.  In addition, each member shall have been a
citizen and resident of the State of California for at least five
years next preceding his or her appointment.
   (e) For the purposes of construing this article, the terms
"general engineering contractor," "general building contractor," and
"specialty contractor" shall have the meanings given in Article 4
(commencing with Section 7055) of this chapter.
  SEC. 4.  Section 7003 of the Business and Professions Code is
amended to read:
   7003.  Except as otherwise provided, an appointment to fill a
vacancy caused by the expiration of the term of office shall be for a
term of four years and shall be filled, except for a vacancy in the
term of a public member, by a member from the same branch of the
contracting business as was the branch of the member whose term has
expired.  A vacancy in the term of a public member shall be filled by
another public member.  Each member shall hold office until the
appointment and qualification of his or her successor or until the
office is deemed to be vacant pursuant to Section 1774 of the
Government Code, whichever first occurs.
   Vacancies occurring in the membership of the board for any cause
shall be filled by appointment for the balance of the unexpired term.

   No person shall serve as a member of the board for more than two
consecutive terms.
   The Governor shall appoint four of the public members, including
the public member who is from a statewide senior citizen
organization, the local building official, the member of a labor
organization representing the building trades, and the five
contractor members qualified as provided in Section 7002.  The Senate
Rules Committee and the Speaker of the Assembly shall each appoint
two public members.
  SEC. 5.  Section 7007 of the Business and Professions Code is
amended to read:
   7007.  Eight members constitute a quorum at a board meeting.
   Due notice of each meeting and the time and place thereof shall be
given each member in the manner provided by the bylaws.
  SEC. 6.  Section 7011.7 of the Business and Professions Code is
amended to read:
   7011.7.  (a) The registrar shall review and investigate complaints
filed in a manner consistent with this chapter and the Budget Act.
It is the intent of the Legislature that complaints be reviewed and
investigated as promptly as resources allow.
   (b) The board shall set as a goal the improvement of its
disciplinary system so that an average of no more than six months
elapses from the receipt of a complaint to the completion of an
investigation.
   (c) Notwithstanding subdivision (a), the goal for completing the
review and investigation of complaints that, in the opinion of the
board, involve complex fraud issues or complex contractual
arrangements, should be no more than one year.
  SEC. 7.  Section 7021 is added to the Business and Professions
Code, to read:
   7021.  The board shall conduct the following studies and reviews,
and shall report to the department and the Legislature no later than
October 1, 2001.
   (a) The board shall conduct a comprehensive study of the issues
surrounding home improvement contracts that involve home equity
lending fraud and scams, and provide recommendations to deal with
this problem.
   (b) The board shall conduct a comprehensive study of its
reorganization ("reengineering") plan to restructure intake,
mediation, and investigation services, and evaluate the impact this
effort has had on consumer and industry access to board staff, its
ability to reduce timeframes for complaint processing and
investigations, increasing mediations, investigations, and legal
actions, productivity of staff, and overall costs to the board.
   (c) The board shall conduct a comprehensive study and review of
recovery fund programs in California and other states which provide
compensation to consumers for financial injury caused by a licensed
professional.  It should evaluate the effectiveness of these programs
and whether such a recovery fund could benefit consumers who are
harmed as a result of contractor fraud, poor workmanship,
malfeasance, abandonment, failure to perform, or other illegal acts.

   (d) The board shall conduct a comprehensive study in consultation
with the Department of Insurance, on the use of surety bonds to
compensate homeowners for financial injury sustained as a result of a
contractor's fraud, poor workmanship, malfeasance, abandonment,
failure to perform, or other illegal acts.  This study shall include
consideration of the payout criteria of bonds, increasing the bond
amount, a "step-bonding" approach based on the amount of the prime
contract, and the requirement of performance or payment bonds.  This
study shall additionally consider whether to require contractors to
carry general liability insurance and whether to establish a
guarantee program in order to provide the appropriate insurance and
bond coverage in connection with a homeowner's employment of a
contractor.
   (e) The board shall review its current disclosure policy and
provide recommended changes.
  SEC. 8.  Section 7065.05 of the Business and Professions Code is
amended to read:
   7065.05.  (a) The board shall periodically review and, if needed,
revise the contents of qualifying examinations to insure that the
examination questions are timely and relevant to the business of
contracting.  The board shall, in addition, construct and conduct
examinations in such a manner as to preclude the possibility of any
applicant having prior knowledge of any specific examination
question.
   (b) The board shall establish a priority list and schedule for the
completion of an occupational analysis of its current examinations.
The board shall complete this analysis with respect to those
examinations having the highest and moderately high need for revision
by July 1, 2001, and complete this analysis with respect to all
remaining examinations for revision by July 1, 2002.
  SEC. 9.  Section 7092 is added to the Business and Professions
Code, to read:
   7092.  (a) (1) The director shall appoint a Contractors' State
License Board Enforcement Program Monitor no later than January 31,
2001.  The director may retain a person for this position by a
personal services contract, the Legislature finding, pursuant to
Section 19130 of the Government Code, that this is a new state
function.
   (2) The director shall supervise the enforcement program monitor
and may terminate or dismiss him or her from this position.
   (b) The director shall advertise the availability of this
position.  The requirements for this position include experience in
conducting investigations and familiarity with state laws, rules, and
procedures pertaining to the board and familiarity with relevant
administrative procedures.
   (c) (1) The enforcement program monitor shall monitor and evaluate
the Contractors' State License Board discipline system and
procedures, making as his or her highest priority the reform and
reengineering of the board's enforcement program and operations, and
the improvement of the overall efficiency of the board's disciplinary
system.
   (2) This monitoring duty shall be on a continuing basis for a
period of no more than two years from the date of the enforcement
program monitor's appointment and shall include, but not be limited
to, improving the quality and consistency of complaint processing and
investigation and reducing the timeframes for each, reducing any
complaint backlog, assuring consistency in the application of
sanctions or discipline imposed on licensees, and shall include the
following areas:  the accurate and consistent implementation of the
laws and rules affecting discipline, staff concerns regarding
disciplinary matters or procedures, appropriate utilization of
licensed professionals to investigate complaints, the board's
cooperation with other governmental entities charged with enforcing
related laws and regulations regarding contractors.
   (3) The enforcement program monitor shall exercise no authority
over the board's discipline operations or staff; however, the board
and its staff shall cooperate with him or her, and the board shall
provide data, information, and case files as requested by the
enforcement program monitor to perform all of his or her duties.
   (4) The director shall assist the enforcement program monitor in
the performance of his or her duties, and the enforcement program
monitor shall have the same investigative authority as the director.

   (d) The enforcement program monitor shall submit an initial
written report of his or her findings and conclusions to the board,
the department, and the Legislature no later than August 1, 2001, and
every six months thereafter, and be available to make oral reports
to each, if requested to do so.  The enforcement program monitor may
also provide additional information to either the department or the
Legislature at his or her discretion or at the request of either the
department or the Legislature.  The enforcement monitor shall make
his or her reports available to the public or the media.  The
enforcement program monitor shall make every effort to provide the
board with an opportunity to reply to any facts, findings, issues, or
conclusions in his or her reports with which the board may disagree.

   (e) The board shall reimburse the department for all of the costs
associated with the employment of an enforcement program monitor.
   (f) This section shall remain in effect only until January 31,
2003, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 31, 2003, deletes or extends
that date.
  SEC. 10.  Section 7159.3 is added to the Business and Professions
Code, to read:
   7159.3.  (a) A home improvement contract and an estimate for home
improvement work shall be accompanied by and include all of the
following:
   (1) A statement prepared by the board through regulation that
emphasizes the value of commercial general liability insurance and
encourages the owner or tenant to verify the contractor's insurance
coverage and status.
   (2) A check box indicating whether or not the contractor carries
commercial general liability insurance, and if that is the case, the
name and the telephone number of the insurer.
   (3) A checklist prepared by the board through regulation setting
forth the items that an owner contracting for home improvement should
consider when reviewing a proposed home improvement contract.
   (b) This section shall become operative three months after the
board adopts the regulations referenced in paragraph (1) of
subdivision (a).
  SEC. 11.  Section 7164 of the Business and Professions Code is
amended to read:
   7164.  (a) Notwithstanding Section 7044, every contract and any
changes in a contract, between an owner and a contractor, for the
construction of a single-family dwelling to be retained by the owner
for at least one year shall be evidenced in writing signed by both
parties.
   (b) The writing shall contain the following:
   (1) The name, address, and license number of the contractor.
   (2) The approximate dates when the work will begin and be
substantially completed.
   (3) A legal description of the location where the work will be
done.
   (4) The language of the notice required pursuant to Section
7018.5.
   (5) (A) A statement prepared by the board through regulation that
emphasizes the value of commercial general liability insurance and
encourages the owner to verify the contractor's insurance coverage
and status.
   (B) A check box indicating whether or not the contractor carries
commercial general liability insurance, and if that is the case, the
name and the telephone number of the insurer.
   (c) The writing may also contain other matters agreed to by the
parties to the contract.  The writing shall be legible and shall
clearly describe any other document which is to be incorporated into
the contract.  Prior to commencement of any work, the owner shall be
furnished a copy of the written agreement, signed by the contractor.
The provisions of this section are not exclusive and do not relieve
the contractor from compliance with all other applicable provisions
of law.
   (d) Every contract subject to the provisions of this section shall
contain, in close proximity to the signatures of the owner and
contractor, a notice in at least 10-point bold type or in all capital
letters, stating that the owner has the right to require the
contractor to have a performance and payment bond and that the
expense of the bond may be borne by the owner.
   (e) The requirements in paragraphs (5) of subdivision (b) shall
become operative three months after the board adopts the regulations
referenced in subparagrah (A) of paragraph (5) of subdivision (b).
